Cooperation key for global energy and climate challenges

OPEC Bulletin Commentary – November-December 2023

In a historic moment at the 36th OPEC and non-OPEC Ministerial Meeting (ONOMM) on 30 November Alexandre Silveira de Oliveira, Minister of Mines and Energy of the Federative Republic of Brazil, announced that South America’s largest economy would join the OPEC+ Charter of Cooperation (CoC) at the start of 2024.

Established at the 6th ONOMM in July 2019, the CoC is a permanent platform dedicated to fostering cooperation on longer-term challenges and opportunities for the oil industry, with the goal of contributing to secure energy supplies and lasting stability.

Since its inception, the CoC has facilitated ministerial- and technical-level dialogue between countries in the Declaration of Cooperation (DoC) — which celebrated its seventh anniversary on 10 December 2023 — on a plethora of issues, including supply and demand outlooks, investments, technology, climate change and energy transitions, to name a few.

Ministers from the group’s 23 participating countries met de Oliveira’s membership announcement with a standing ovation, delivering a warm welcome to a country whose oil production continues to go from strength to strength on the world stage. OPEC’s 2023 World Oil Outlook sees Brazil’s output rising from 3.7 million barrels per day (mb/d) in 2022 to 4.8 mb/d in 2028, and anticipates that Brazil will be one of the key contributors to non-OPEC liquids supply growth in the medium term.

Along with its prominence in oil production, Brazil is also a leader in renewable energy, thereby demonstrating a pragmatic ‘all-fuels and all-technologies’ approach to tackling emissions and fostering energy security, affordability and sustainability.

Brazil’s example demonstrates that it is possible to invest heavily in renewables while producing the oil the world needs today, and will continue to need in the years ahead, with its energy investments over the next five years totaling over $100 billion.

Against a global backdrop of looming population and energy demand growth, prudent energy policies and corresponding levels of investments like those espoused by Brazil underline that oil and renewables are not competitors in a zero-sum game.

Indeed, the reality is that the mass production of renewable energy technologies is currently not even possible without oil or its derivatives. Wind turbines cannot be produced without petroleum end-use products like fibreglass, resin and plastic; petrochemical products like ethylene are needed in copolymers that cover the photovoltaics on solar panels; and lithium-ion batteries in electric vehicles are made of graphite, which rely on calcined petroleum coke.

This reality and the sentiment related to cooperation among all stakeholders is apparent in the consensual and positive ‘UAE Consensus’ that emerged at COP28 in Dubai. OPEC is proud of its Member Country, the UAE, for its excellent organization of COP28, which saw record participation and numerous global milestones.

In his remarks at the Closing Plenary, the COP28 President, Dr Sultan Ahmed Al Jaber, noted that the ‘UAE Consensus’ had been “built on common ground … strengthened by inclusivity… and reinforced by collaboration”.

Dialogue and cooperation also lie at the forefront of OPEC’s modus operandi, and the Organization is proud of its role in helping to foster market stability and deliver energy security while reducing emissions.

In this respect, OPEC Member Countries will continue to invest in upstream and downstream operational efficiencies; deploy their vast expertise to decarbonize the oil industry; mobilize innovative technologies like carbon capture utilization and storage; make major investments in renewables and hydrogen; and promote the circular carbon economy.

In doing so, they will seek to contribute to just, orderly and inclusive energy transitions that take into account all national circumstances, pathways and approaches. Indeed, as underlined by Brazil joining the CoC, OPEC+ will continue to seek the means to build and evolve cooperation in order to deliver the sustainable market stability and energy security that is vital for both producers and consumers.

Addressing the world’s looming energy and climate challenges must continue to put pragmatism and realism front and centre. All stakeholders need to look to deliver reliable energy for all, alongside reductions in emissions, and in a nationally determined manner that befits a country’s circumstances. We owe it to future generations to do so.

OPEC Bulletin November-December 2023

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